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Women’s Trousers, Other U.S. Exports Hit with Major Increase in EU Retaliatory Tariffs

Monday, April 29, 2013
Sandler, Travis & Rosenberg Trade Report

Effective May 1, the European Union will significantly increase the additional tariffs it levies on certain imports from the United States in response to the continuing distribution of antidumping and countervailing duty revenues to U.S. producers. Women’s denim trousers, which had been dropped from the EU retaliation list several years ago, will be hit with a 26% additional tariff, bringing the total import duty for the period May 1, 2013, through April 30, 2014, to 38%. Additional tariffs on frozen sweet corn, crane trucks, and metal eyewear frames and mountings, which had been set at 6% for the past year, will also be increased to 26%.

In an effort to further discourage unfair trade practices, the Continued Dumping and Subsidy Offset Act, or Byrd Amendment, allowed the distribution of AD/CV duty revenues to affected domestic producers for qualified expenses. Congress repealed the law in 2006 in response to an adverse World Trade Organization decision but specified that AD/CV duties collected on entries made until Oct. 1, 2007, could still be distributed, a process that remains ongoing due to the retrospective nature of the United States’ AD/CV duty system.

The additional tariffs the EU imposes are revised annually in correlation with the amount of AD/CV duty revenues distributed the previous year. U.S. Customs and Border Protection officials say that while the total amount of money available for distribution will decline over time, the specific amounts available from year to year may rise or fall depending on the total amount of AD/CV duties collected, which itself can be affected by a number of factors. For example, the conclusion of litigation affecting a large volume of entries of goods subject to AD or CV duties could result in the liquidation of those entries and therefore the release of a significant sum of duty revenues for distribution. Or, CBP may have been successful in its efforts to recover AD/CV duties that had previously gone uncollected for some reason, which sometimes total in the millions or even tens of millions of dollars.

Distributions of AD/CV duties collected on imports from the 27 EU member states apparently increased from $4.44 million in FY 2011 to $84.4 million in FY 2012, thus prompting the rise in retaliatory tariffs. It is not clear what accounted for this increase or whether it may be repeated in the future, considering that the retaliation amount had previously declined for several years.

ST&R’s U.S. and EU offices are working to help affected companies formulate both short-term tactical and longer-term strategic options. For more information, contact ST&R managing partner Tom Travis at 305-894-1001 or via email.

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